By Irene Dominguez (ACCION USA Consultant) 

By now, you've probably heard about the new Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 - a new law that will significantly affect consumer credit card usage. President Obama signed this federal law on May 22, 2009 to prevent unfair practices in the credit card industry.  While the first changes went into effect on August 20, 2009 and there are more to come in December 2010, the most significant regulations took effect on Monday, February 22, 2010!

These tips will help you know what to expect:

• Pay attention to your mail. The new law requires credit card companies to communicate with you more clearly and in advance. They must send your statement 21 days before the due date to give you more time to pay the bill. Additionally, they must send you any changes in your credit card terms 45 days in advance.
• Expect changes. Until now, many credit card issuers made money with hidden fees and interest rate hikes. The CARD Act's limits on these practices will undoubtedly mean a loss of profit for credit card companies, so be prepared for them to find new ways to replace those projected gains. This could mean increased annual charges or interest rates, but right now we really don't know what to expect. What we do know is that we must remain alert to possible changes in the near future.
• Carefully respond to changes in your card terms. As a consumer, the new law gives you the right to close an account if you are not happy with the new terms offered. When you close the account, you have 5 years to pay the account balance under the original terms. This may be a good option for you, but keep in mind that closing an active account will negatively affect your credit, especially if you are closing an account that you have had for a long time. Instead, if your credit card's terms have changed in a negative way, just avoid using that credit card. Keep it open and active with a minimum balance, using it just for small amounts that you can pay in full at the end of the month (so you do not pay those high interest rates). For larger expenses, use a credit card with more favorable terms.
• Commit yourself to being an educated consumer. An important rule of the new legislation is that credit card issuers must communicate clearly with consumers. To get the desired results of this communication, you have to do your part: carefully read all correspondence with your creditors, and keep yourself updated on new rules and regulations!

The CARD Act contains many other new rules.  It limits the use of universal default, so that a credit card issuer may not increase your interest rate on one card simply because you made a late payment on another card.  Also, the CARD Act limits the use of authorized charges when they are over your card's credit limit; in the past, these charges have added up to very high costs for cardholders.  To read more about the Card Law document (in English), visit http://www.govtrack.us/congress/billtext.xpd?bill=h111-627.